Well, being a freelancer has a lot of perks. Besides being my own boss, I don’t have to wait for a paycheck till the month ends. Every now and then, I receive a payout from multiple freelancing platforms, and that’s how I manage my household expenses.

However, I believe there’s a major problem with frequent payouts like this. Freelancers may not be able to save money or spend too much from every payout. Back when I did not learn how to manage my finances effectively, I had to borrow money from friends sometimes.

Over time, managing finances became easier for me; I’ve learned to master this art. Below, I’m going to share a few easy and implementable tips that may help you get smarter with your money.

Create a Separate Savings Account

This is the first and most crucial step in managing your finances as a freelancer. And while it’s easier to open a new savings account, it’s the following rule that I believe is difficult to follow:

Make sure you save about 20% to 30% from every payout you receive and transfer it to your savings account. Also, consider this money “untouchable” under normal circumstances because you’ll be saving this amount for rainy days (I discuss that ahead).

The rest of the money from your payout is yours to spend. You may create new gigs, buy connects on Upwork, pay bills, and more! Save at least a quarter of every payout in a separate savings account.

Track Your Expenses

A major part of managing your finances comes down to effectively keeping track of them. Being self-employed, most freelancers also have to cover the cost of their insurance. And for that reason, besides your savings, you may need to watch out for insurance and, not to forget, taxes.

So, it’s best to track your expenses – minus the savings. This way, you’ll be mindful of how much money to spend on different tasks. More importantly, you may be able to identify opportunities to cut down on your expenses, which will be discussed next.

Cut Down Your Expenses

Cutting down your expenses means saving on your budget to spend on more important tasks. And as a freelancer, I believe there are multiple opportunities to cut down some major expenses. For instance, if you work in a co-working space, you may save on rental fees and commute by working from home.

If you already work from home, how about bundling your internet with a TV or home phone from the same service provider instead of separate service providers? This way, I have tried and successfully been able to save a lot every month with Xfinity packages! I get to pay less for swift internet and numerous TV channels, and that too, on a single bill instead of multiple ones from different service providers.

Instead of ordering regular take-outs, why not try cooking every once in a while? That would majorly help manage your food budget.

Like that, look around, and you may find numerous ways to cut down on your expenses.

Save for Your Retirement Too

Some freelancers may never retire, but I want to hang up my boots someday. And for the post-retirement life, I’d love to have a retirement fund with which to peacefully spend the rest of my days.

We can also call it a downside of freelancing that we don’t get any gratuity on retirement. So, we have to plan for our retirement fund ourselves.

The solution here is that while you’re building your emergency fund and transferring it to savings accounts, start saving for post-retirement life, too. You may seek out possible long-term investment options to invest your retirement fund in. This way, by the time you retire, hopefully, you’ll have enough to live a comfortable life.

Bonus Section: Use Money Management Apps

Another way to help you get better with your finances is by using budgeting apps. Below are some really good budgeting that can help you sort your finances by putting in minimal effort:

• You Need a Budget (YNAB)
• Goodbudget
• PocketGuard
• Honeydue
• Empower Personal Wealth